South America Calling

Brazil to End Amazon Soy Moratorium

Turn the clock back eight years and Brazil's soybean industry was in the eye of a storm.

International condemnation of the runaway deforestation of the Amazon had risen to a clamor and environmentalists were putting a fair chunk of the blame at the soybean industry's door, which was expanding at breakneck speed on the fringes of the forest in northern Mato Grosso.

The industry's European customers were getting uncomfortable having their products associated with the deforestation of the world's largest rainforest and threatened to boycott Brazilian soy.

With government seemingly unable to monitor or control the deforestation, Brazil's soy industry announced a moratorium on purchasing soybeans from the Amazon.

It used satellite imaging to enforce the restrictions on purchases from areas cleared illegally or any land cleared after July 2006 in the Amazon biome, which isn't just deep forest but also includes areas of transition between the forest and Cerrado savannah close to big Mato Grosso soy regions like Sinop and Sorriso.

By any measure, the ban has been effective.

Soybeans were directly responsible for just 0.7% of all Amazon forest cleared between 2007 and 2012, according to figures from the soy moratorium organization.

Fast-forward to 2014, and even most environmental groups will say that soybeans are no longer a threat to the rainforest.

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Of course, the merit doesn't go to the soybean industry alone.

Back in 2004-05, chaos reigned in the Amazon with government presence limited, restrictions on clearance unclear and a culture that equated deforestation with progress.

Since then, the federal government has moved in, making it clear that unauthorized deforestation is unacceptable and increasing monitoring and prosecutions.

That ushered in a fivefold reduction in Amazon deforestation between 2004 and 2012, totaling just 1,900 square miles two years ago.

The legal uncertainty over farmers' environmental obligations was also much reduced with the passage of a new Forestry Code in 2012. The code clearly outlines farmer's obligations in the forest and beyond, and offered them amnesty from prosecution if they corrected past illegal deforestation.

With the state seemingly now in a position to control farming in the Amazon and deforestation, Brazil's soybean industry feels the need for a moratorium has diminished.

As a result, earlier this month, it announced that the moratorium would end on Dec. 31, 2014.

"The moratorium was always meant to be temporary and after eight years it has rather lost its meaning," said Carlo Lovatelli, president of the Brazilian Oilseed Industry Association (ABIOVE).

So, from next year, farmers in the Amazon region will be able to sell soybeans planted on newly cleared land, as long as they follow Brazilian legislation.

Environmental Group Greenpeace -- a signatory to the moratorium agreement -- has expressed concern.

"In the context of deforestation showing signs of growth and new infrastructure projects consolidating in the heart of the Amazon to transport soybeans, the challenges continue to be enormous," said Paulo Adario, Amazon campaign director at Greenpeace.

ABIOVE admits that soybean production, and soybean-related deforestation, will probably grow, especially along the BR-163 road that connects Mato Grosso with Amazon ports and will be increasingly used to freight beans in the coming years. But it will not become a driver for deforestation again, it says.

Soybeans may become responsible for 2% of deforestation but we don't see its influence exploding, said Bernardo Pires, sustainability manager at ABIOVE.

The big question mark over the future is the ability of the Brazilian government to impose the new Forestry Code, the bedrock of which is a new farm registry. If the government lets a legal vacuum return and farmers sell more and more Amazon soy to the Chinese, who don't share the same environmental reservations as the Europeans, environmental clamor could rise again.

But if something like that happens, the moratorium can always be brought back, notes Sergio Mendes, general director of the Brazilians Grain Exporters Association (ANEC).

And truth is the legal vacuum scenario is unlikely as Brazil and Brazilians are now much more committed to preserving the Amazon than just a decade ago when deforestation was not always condemned. That environmental awareness has extended to the soybean industry, whose expansion is no longer focused on the fringes of the forest but in the eastern Cerrado savannah region in the northeastern states of Maranhao, Tocantins,

Just a decade ago, the Environmental Ministry feared 35% of the Amazon will have disappeared by 2020. In fact, the figure has slipped over the last ten years to approximately 19%.

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